Square reports processing $5 billion in transactions annually

Fresh off rumors that it could be headed for a $4 billion valuation, mobile transaction service Square is reporting it is processing money at a rate of $5 billion every year. Square’s mobile payment platform allows users to purchase a specialized credit card reader that can plug into mobile devices such as an iPhone or […]

Fresh off rumors that it could be headed for a $4 billion valuation, mobile transaction service Square is reporting it is processing money at a rate of $5 billion every year.

Square’s mobile payment platform allows users to purchase a specialized credit card reader that can plug into mobile devices such as an iPhone or iPad, effectively turning those devices into mobile cash registers for digital purchases with Square’s free app. Since it launched the credit card reader service in 2009, Square has added more apps for the iPad and iPhone to offer even more capabilities to merchants and customers.

The service is continuing to pull in new users and process more money, according to a story from Fierce Mobile Content, and Square has even increased its transaction processing numbers in the face of a new service from PayPal, one of its major competitors. That’s PayPal’s new Here service, which was introduced in March and allows users to scan credit cards with a dedicated reader that can attach to mobile devices.

Square’s COO, Keith Rabois, told Bloomberg that Square had increased its transaction processing by 25 percent since PayPal Here launched, and more than 1 million merchants are using Square to accept credit cards when selling goods and services. Rabois also said Square had upgraded its service so that credit card transactions completed before 5 p.m. make cash available to merchants as early as the next day, instead of the five-day wait incumbent on other credit card services. Square takes a flat rate of 2.75 percent from each transaction.

We knew that Square was continuing to do well, but it seems every time the company’s name is mentioned, it’s because it’s doing more and more business. The rumor from AllThingsD that Square was getting a big new valuation was a surprise mostly because of the value being thrown around: $4 billion is a lot higher than the company’s $1 billion valuation nearly a year ago.

Still, even with PayPal entering Square’s space, the company seems to be faring well. A valuation of $4 billion still sounds pretty high, but Square undoubtedly has further plans to increase its share of the mobile transaction market. If it executes on them, it seems like a no-brainer to expect it to continue to grow.

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Phil Hornshaw is a freelance writer, editor and author living in Los Angeles, dividing his time between playing video games, playing video games on his cell phone, and writing about playing video games. He’s also the co-author of So You Created a Wormhole: The Time Traveler’s Guide to Time Travel, which attempts to mix time travel pop culture with some semblance of science, as well as tips on the appropriate means of riding dinosaurs. Check out his Google+ profile.